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Saturday, July 11, 2015

What is The Ideal Size of an Investment Condo?


Wazzup Pilipinas!

In condo investing, size does matter. But whether to go smaller or bigger is the more pressing issue. After all, how the buyer and investor plan to use the property in the medium- to long-term will help them determine the ideal size of their next condo purchase, because the condo’s size has a lot to do with its eventual profitability.

With this, global property portal Lamudi Philippines gives out advice on the ideal size of a condo property depending on the type of investment.


IF YOU BUY AND HOLD…

Go bigger

Investors who plan to purchase and hold on to the condo property in the long term are better off with bigger units: those with three bedrooms or at least 150 sqm. Although these condos are definitely more expensive than smaller ones, they offer good returns in terms of capital appreciation. In fact, according Colliers International Philippines, luxury three-bedroom condos in the three markets it monitors (Makati CBD, Bonifacio Global City, and Rockwell Center) are expected to appreciate in value by between 5.1 and 6.3 percent by the end of this year.

Where to buy them

These properties are usually found in Metro Manila’s business districts, such as the Makati CBD, Ortigas Center, Rockwell Center, and Bonifacio Global City. However, not all condos in these areas can be considered “luxury.” Smaller condos (less than 100 sqm), even those advertised as three bedrooms, cannot be considered as such and, thus, have lower resale value.

IF YOU BUY AND RENT OUT TO SALARIED EMPLOYEES…

Go smaller

Depending on your target market. If you target renters whose monthly incomes range from Php23,400 to Php67,500—junior executives and supervisors, based on Jobstreet 2015 salary report—then you are better off with smaller condos (from 21 to 32 sqm). Metro Manila’s buoyant IT and BPO sectors, among other industries, make rents for these condos are relatively affordable for these young, usually single, workers. Monthly rents for these condos can range from Php14,000 to Php21,000, based on Lamudi price data.


Where to buy them

Many of these condos are found in the periphery of Metro Manila’s CBDs, especially the areas close to the MRT stations along EDSA (Magallanes, Boni-Pioneer, and Shaw). Living in one of these areas also make a lot of sense to these renters, as commuting to work becomes easier.


IF YOU BUY AND RENT OUT TO EXPATS…

Go bigger

Especially for those with families. Metro Manila’s high-end leasing market is quite buoyant given the high number of expats employed in the BPO sector. These condos usually have three bedrooms and sizes of at least 200 sqm. According to Colliers, condos of this size in Metro Manila’s high-end areas are expected to post rental rate increase of between 4.7 and 5.1 percent by the end of this year.


Where to buy them

Expats prefer areas where work, leisure, and schools for their kids are within reach so the Makati CBD, Rockwell Center, and Bonifacio Global City are a good bet for condo investment. These places are self-contained, mixed-use developments that expats like because convenience and security are their utmost consideration.

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